Once the pearl of Romanias industry, Oltchim Ramnicu Valcea, the countrys biggest chemical plant, will be sold piece by piece to interested investors, according to the companys new privatization strategy.
Oltchim will be split into nine separate asset packages, which will be sold either individually or together to interested investors, according to a public announcement. Thus, chances are that Oltchim will never be able to operate as an integrated company.
Oltchim, which had a turnover of over EUR 500 million in 2007, currently operates at only about a third of its capacity, as its most important installations, those that produce PVC, have been closed for years. Oltchim still produces polyols and caustic soda. Last year, the company had a turnover of EUR 168 million.
The state has been trying to privatize Oltchim since for more than 15 years, but all attempts failed. Moreover, a legal mistake the state made in 2005, when it turned part of Oltchims debt to the state budget into shares, has led to the cancelling of the respective capital increase and brought a load of debt on the company. This and other strategic mistakes by the state and the companys management have led to its insolvency in January 2013.
Oltchim had some EUR 800 million worth of debt when it went into insolvency. In 2015, the state cancelled about two-thirds of the debt but the operation is now analyzed by the European Commission for possible illegal state aid.
The commissions verdict, which should come by the end of September, is key for the new privatization attempt. There are currently about three investors interested in Oltchims assets but the negotiations with these investors have been suspended until the EC announces its decision, according to Gheorghe Piperea, one of the companys judicial administrators.
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